More Pensions Plan to Use ETF’s in 2015/16 : Survey

A significant chunk of institutional investors plan on increasing their use of exchange-traded funds (ETFs) and exchange-traded notes (ETNs), according to a survey released today by Pensions & Investments.

The results, from P&I:

Some 34% of officials at defined benefit plans, foundations and endowments say they use ETFs or ETNs, and of those, one-quarter plan to increase their usage, a new Pensions & Investments survey shows.

Among non-users, about 14% of those surveyed say it’s “somewhat likely” they would begin to invest via exchange-traded funds and notes within the next year, according to the survey.

[…]

The survey found rebalancing was the No. 1 reason for using ETFs and ETNs, cited by 41% of the defined benefit plan, endowment and foundation executives. Tactical adjustments, transition management and long-term investing each was cited by 39% of respondents, with liquidity management at 32% and cash equitization and risk management at 20% each.

The results show that institutional investors are using ETFs/ETNs as long-term investments, expanding on their traditional usage for transition management and rebalancing, said Todd Rosenbluth, senior director at S&P Capital IQ, New York, and director of ETF and mutual fund research.

He said some institutional investors are using ETFs and ETNs as part of their core holdings in a diversified portfolio. Others look at them as vehicles to invest tactically, such as moving in and out of various sector/theme portfolios depending on their market views, which he said allows investors to reshape their portfolio quickly.

Read the full results here.